Since early beginnings washing lettuce by hand, followed by a $1 million loss on machinery, this salad and herb production business has resurrected itself. Now it looks set on entering the global marketplace.

Viability of a business idea

Coastal Hydroponics was born in the 1980s, when Barry and Lyn Moss, seeking a sea change, moved from a Wagga Wagga broadacre farm to 10 rocky acres on the Gold Coast.

They spent the early days away from farming and found the move a lot tougher than they’d expected.

It wasn’t easy according to Belinda Adams, Barry and Lyn’s daughter and current co-owner and manager, who was only a child at the time.

“One part of the problem was in the rocky land they’d bought. Mum and Dad tell stories that they sat on the steps and cried, asking: ‘What have we done?’

“Then they realised they needed to go back to what they really knew how to do: growing crops using the resources at hand. When they looked at it, the problem with the rocky land became an opportunity.”

Cost reduction strategies

To transform their rocky plot into a viable business, Barry and Lyn decided to try hydroponics for growing lettuce. “There was no way the rocky land was going to be useful for any in-ground production,” Belinda says, “so Dad explored the option of hydroponics.

"There was no other hydroponic farm in Queensland – it was pioneering for the day. We began growing iceberg and fancy lettuce with success.”

With oversized lettuce being unsuitable for sale, there was significant wastage, so Lyn suggested they cut the lettuce, wash and bag the product, then sell it as salad leaves. The process began by hand.

“We’d wash the leaves in the laundry tub in the shed, put them into a washing basket and then shake, shake, shake!” Belinda laughs. “That was the dewatering system that we had!”

Highs and lows of automation

Ten years ago, with Lyn and Barry set to retire, former schoolteacher Belinda and her husband Paul, an ex-police officer, began managing the business. Their first objective was automation, so they invested $1 million in an Italian automation system.

“We went from manually hand-packing punnets and putting them through a flow wrapper to everything being automated,” Belinda explains. “Basically, you could put it in one side and it would come out the other side wrapped and ready to go.”

It was an enormous investment at the time, which unfortunately didn’t work out.

“The machinery came with a significant amount of problems,” she says.

“The equipment couldn’t stand up to the conditions, such as the water associated with production, the cleaning chemicals and the technology it used. We had a lot of breakdowns with that equipment.”

The setback taught them that research is crucial. “It was a massive learning curve in terms of technology and what the best types of technology are to use,” Belinda admits. “You have to match the technology to the product.”

A new business plan

After this significant financial setback, Belinda engaged a lean management strategy to lower business costs.

“We would all work significantly within the business, a huge 80 to 100 hours a week, without even blinking an eyelid,” she says. “For a period of six to seven years, I worked the facility all the time. I was in production the whole time – we were able to minimise our staff and reduce staff costs to try and recover what we’d lost.”

Next step was the brave move to follow a new machinery business plan. In late 2016, the couple invested in new automation equipment and revisited the entire process flow. Supermarket chain Coles was concerned about how the transition would affect supply, so Belinda used her scheduling skills from her school teaching days to meticulously plan.

They were able to transition to the new facility without losing a single working day.

“In terms of flow, it was really important to minimise movement around the facility, making sure we have designated work areas so the process works smoothly and doesn’t create issues for people in terms of putting their pallets away or accessing what they need.

“It’s been about making sure that every part of the facility is highly functioning and very streamlined.”

Global expansion strategy

With its new facility in place, Coastal Hydroponics is set for significant business growth. After their early financial setback, however, the couple are cautious.

“I want to know that every leaf we grow has a home before we plant it or invest in it,” Belinda says. “I want a contract. I’m all about comfortable, incremental growth. You can’t put a business under too much pressure.”

Today, the business produces a broad range of salad leaves and herbs, supplying up to 28 tonnes of product per week to 170 Coles stores across Queensland. It employs about 50 people across two sites, in order to make sure fresh product is delivered on time to stock supermarket shelves.

The next step for the pair is investigating entering the global marketplace and export opportunities.

“I’ve been working with NAB very closely on the exports and am thrilled by their dedication to the business, in terms of their willingness to support and assist us wherever we need it,” Belinda says.

There are plenty of opportunities for the future. In 2016 Belinda and Paul attended Asia Fruit Logistica, a specialist annual trade show and conference event for the Asian and international fruit and vegetable business, for research.

“Some export opportunities are very hit and miss and can be very short term,” Belinda says.

“For us, it’s about finding the right opportunity that’s going to be long term with significant growth, so that it warrants the time and investment.”

Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.